Appeals

120 Pages·2015·2.46 MB·English

SUPREME COURT, APPELLATE DIVISION
FIRST DEPARTMENT
MAY 19, 2015
THE COURT ANNOUNCES THE FOLLOWING DECISIONS:
Sweeny, J.P., Andrias, Saxe, DeGrasse, Gische, JJ.
13854N Jose Marin, et al., Index 111531/07
Plaintiffs,
-against-
Constitution Realty, LLC, et al.,
Defendants.
- - - - -
Sheryl Menkes, Esq.,
Nonparty Appellant,
-against-
David B. Golomb, Esq., et al.,
Nonparty Respondents.
_________________________
Ballard Spahr Stillman & Friedman LLP, New York (John B. Harris
of counsel), for appellant.
Sullivan Papain Block McGrath & Cannavo P.C., New York (Brian J.
Shoot of counsel), for David B. Golomb, respondent.
Parker Waichman LLP, Port Washington (Jay L.T. Breakstone of
counsel), for Jeffrey A. Manheimer, respondent.
_________________________
Order, Supreme Court, New York County (Carol R. Edmead, J.),
entered February 21, 2014, which, insofar as appealed from,
denied nonparty appellant’s motion to fix nonparty respondent
David B. Golomb, Esq.’s share of net attorneys’ fees at 12% and
to determine nonparty respondent Jeffrey A. Manheimer, Esq.’s
share of net attorneys’ fees on a quantum meruit basis, granted
Golomb’s motion to fix his share of net attorneys’ fees at 40%,
and granted Manheimer’s motion to fix his share of net attorneys’
fees at 20%, affirmed, without costs.
In February 2009, nonparty appellant Sheryl Menkes, as
attorney of record for plaintiffs in this personal injury action,
entered into an agreement with Jeffrey A. Manheimer under which
he would, inter alia, act as cocounsel, provide advice to Menkes,
and attend certain depositions and the trial in exchange for 20%
of net attorneys’ fees. In June 2009, the agreement was amended
to specify that Manheimer would act in an advisory capacity only
and would not contact the court or others involved in the
litigation without Menkes’s consent. Neither Manheimer nor
Menkes informed plaintiffs of their arrangement or Manheimer’s
involvement in the case. In August 2009, Menkes wrote to
Manheimer discharging him. Menkes stated that from that point
forward, she “preferred ‘to handle this matter alone’.”
In 2012, plaintiffs were granted summary judgment on
liability. In February or March 2013, Menkes sought assistance
from David Golomb to handle “a scheduled May 2013 mediation.” In
an email to Menkes dated March 12, 2013, Golomb proposed to
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handle the mediation, including preparation of the case for
mediation, for 12% of the attorneys’ fees when the case was
resolved. He further proposed that “[i]f the case [did] not
resolve at the mediation, presently scheduled for May 20, 2013,”
he would be entitled to 40% of net attorneys’ fees. Menkes and
Golomb exchanged a series of emails clarifying, among other
things, that the total amount of fees Golomb would be entitled to
would be 40%, should the case not settle at mediation. The final
language regarding compensation was added at Menkes’s request.
Plaintiffs were notified of this arrangement and consented to it
in writing.
Counsel for the parties and representatives of various
insurers attended a mediation sponsored by JAMS on May 20, 2013.
During this mediation, plaintiffs reduced their demand to $8.5
million and the insurers raised their offer from $2 million to
the full extent authorized by excess insurance carriers, which
was either $7 million or $7.5 million. The mediation session
thereafter ended, although the mediator stated he would attempt
to speak with the excess carriers to see if they would negotiate
directly with plaintiffs’ counsel. It is undisputed that the case
was not resolved on that date.
The following day, Menkes and Golomb exchanged emails
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discussing cash that would be available to plaintiffs under a
$7.5 million structured settlement and the effect that a
“significant” Workers’ Compensation lien would have on the
amounts received by plaintiffs.
On May 22, the mediator called Golomb to inform him that he
had not heard from the excess carriers and would reach out to
them. Golomb told the mediator that the Workers’ Compensation
lien could not be negotiated downward. That same day, JAMS
invoiced Menkes for her portion of five hours of mediation
services for the May 20 session.
Menkes emailed Golomb on May 28th and asked whether there
was “any news.” She proposed to Golomb that perhaps they should
take a harder line in negotiations and directly advise the excess
carriers that “if we do not settle by a date certain we will not
accept settlement and will be prepared to let the jury decide the
value of the case.” Golomb told Menkes that the mediator advised
him that he was going to try and contact the insurers.
Three days later, on May 31, the mediator called Golomb to
convey an offer of $8 million, which plaintiffs accepted. The
mediator thereafter had no further discussions with any party.
The parties then directly negotiated the terms of the structured
settlement, including who would act as plaintiffs’ structured
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settlement broker, plaintiffs’ option in choosing an annuity
company, etc. The final terms were memorialized in a letter
dated June 3, 2013, which was executed on June 5.
Almost immediately thereafter, a dispute arose over the
percentage of the fees due to Golomb and Manheimer. Menkes took
the position that the mediation did not end on May 20, and, since
it continued thereafter and resulted in a settlement, Golomb was
only entitled to 12% of the fees. Golomb argued that the
mediation ended on May 20, and, since the settlement did not
occur as a result of the mediation, he was entitled to 40% of the
fees. With respect to Manheimer, Menkes argues that he was
entitled to fees based on a quantum meruit basis since he
breached the terms of their agreement. Manheimer contends that
the agreement clearly states that he is entitled to 20% of the
fees since the agreement was terminated without cause by Menkes.
The issue before us is one of simple contract
interpretation. Under well established precedent, agreements are
to be generally construed in accord with the parties’ intent (see
Slatt v Slatt, 64 NY2d 966 [1985]). The best evidence of the
parties’ intent is “what they say in their writing” (Schron v
Troutman SandersLLP, 20 NY3d 430, 436 [2013], quoting Greenfield
v Philles Records, 98 NY2d 562, 569 [2002]). “[W]hen parties set
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down their agreement in a clear, complete document, their writing
should as a rule be enforced according to its terms” (W.W.W.
Assoc. v Giacontieri, 77 NY2d 157, 162 [1990]; Jet Acceptance
Corp. v Quest Mexicana S.A., 87 AD3d 850, 954 [1st Dept 2011]).
This rule is particularly applicable where the parties are
sophisticated and are negotiating at arm’s length (see Vermont
Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]).
Language in a written agreement is deemed to be clear and
unambiguous where it is reasonably susceptible of only one
meaning or interpretation (see White v Continental Cas. Co., 9
NY3d 264 [2007]; Riverside S. Planning Corp. v CRP/Extell
Riverside, L.P., 60 AD3d 61, 67 [1st Dept 2008], affd 13 NY3d 398
[2009]). Finally, “[e]xtrinsic evidence may not be introduced to
create an ambiguity in an otherwise clear document” (Jet
Acceptance Corp., 87 AD3d at 854, citing W.W.W. Assoc., 77 NY2d
at 163).
Here, as the dissent agrees, the language of the contract is
unambiguous. Menkes argues that she interpreted the term
“mediation” to constitute an ongoing process that would not be
limited to a single session but rather would continue until an
impasse or other termination had occurred. However, the
assertion by a party to a contract that its terms mean something
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to him or her “where it is otherwise clear, unequivocal and
understandable when read in connection with the whole contract”
is not sufficient to make a contract ambiguous so as to require a
court to divine its meaning (see Vesta Capital Mgt. LLC v
Chatterjee Group, 78 AD3d 411, 411 [1st Dept 2010]). The
specific fee language that Menkes now claims supports her
position was added to the agreement at her request. She takes
the untenable position that she was never advised that the
mediation reached an impasse or had been terminated. Yet despite
the fact that the agreement went through several revisions,
neither party saw fit to add any language to that effect. Both
parties to the agreement are attorneys and thus know the
importance of precision in the words used (see Vermont Teddy Bear
Co., 1 NY3d at 475). These clear terms, under these
circumstances, need no interpretation by the court.
We agree with the dissent that the agreement in question
must be read as a whole. When so read, however, the unambiguous
language of this agreement does not support Menkes’s
interpretation that Golomb was required to take steps to prepare
the case for trial in order to be entitled to the higher fee. In
fact, the language referenced by the dissent states just the
opposite. The two pertinent paragraphs of the agreement provide
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in full:
“I have agreed to review the file, provide whatever
services are needed, with your and your office’s
assistance, to prepare it for the mediation and to
handle the mediation. For those services, I will be
receive [sic] twelve (12%) percent of all attorneys’
fees whenever the case is resolved, whether by settlement,
verdict after trial or appeal, calculated after the
attorneys have been reimbursed for all expenses laid
out. This percentage due shall become fixed and owed
upon execution of this agreement.
“If the case does not resolve at the mediation,
presently scheduled for May 20, 2013, then I will be
responsible, with your and your office’s assistance as
requested, for preparing for trial and trying the case.
After such mediation, I will be entitled to forty (40%)
percent of all attorneys’ fees whenever the case is
resolved, whether by settlement, verdict after trial or
appeal, calculated after the attorneys have been
reimbursed for all expenses laid out. In the event, this
matter has to be tried, the total of all attorneys fees
to which I am entitled for all of the services set forth,
including mediation, shall be forty (40%) percent of
all attorneys’ fees whenever the case is resolved,
whether by settlement, verdict after trial or appeal,
calculated after the attorneys have been reimbursed for
all expenses laid out.”
The first paragraph makes reference to “the mediation,” not
the “process” of mediation. The second paragraph again uses the
term “the mediation” and further defines it as “presently
scheduled for May 20, 2013.” Although the dissent contends the
inclusion of the date is merely “descriptive” and “does nothing
more than identify when the mediation was to commence,” the clear
language of the paragraphs does not support that conclusion.
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Further, there is nothing contained in these paragraphs or the
remainder of the agreement that conditions Golomb’s entitlement
to the higher fee upon his commencing or taking any steps to
prepare for trial.
The record clearly reflects that Menkes’s current position
was part of the original draft of the agreement. As noted, she
requested a number of revisions that were agreed to by Golomb
before both signed the agreement.
In short, Menkes’s argument could best be described as
constituting “buyer’s remorse,” asking us to reform a contract
that is clear on its face and to insert terms that were not
contemplated by the parties because of unforeseen results.
The dissent’s adoption of Menkes’s argument that mediation
is a “process” misses the point. We are not concerned here with
mediation in the abstract or what Menkes claims the term meant to
her. The unambiguous terms of the contract speak for themselves.
The dissent, however, relies on Menkes’s expert for the
proposition that mediation is an ongoing process and interpreting
the contract as we do to limit it to one session would
essentially produce an absurd result. To accept Menkes’s
argument in this regard is to admit extrinsic evidence to an
admittedly unambiguous contract which is prohibited by long-
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standing precedent (see W.W.W. Assoc., 77 NY2d at 163).
Moreover, the expert’s affirmation does no more than set forth
general principles of mediation and his particular practices, and
assumes for purposes of his affirmation that the May 20 mediation
session was “adjourned,” despite the fact that there is nothing
in the record indicating such an “adjournment.” In effect, his
affirmation sets forth the general practice and custom in the
industry. Since the contract is unambiguous, this evidence
should not be considered (see e.g. Greenfield v Philles Records,
98 NY2d 562, 569 [2002]; OFSI Fund II, LLC v Canadian Imperial
Bank of Commerce, 82 AD3d 537 [1st Dept 2011], lv denied 17 NY3d
702 [2011]).
As our dissenting colleague makes reference to the JAMS
website for general propositions applicable to all mediations, we
do the same. Under the heading, “The Joint Meeting,” the website
states:
“When all of the procedures have been agreed to and a
mediation agreement has been signed, the mediation session or
sessions are scheduled” (http://www.jamsadr.com/guide-mediation)
(emphasis added). Thus, as in this case, and contrary to the
expert’s opinion, mediation can, and obviously does on occasion,
consist of only one session. It is important to remember that
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